“Your handshake came over the vastest ocean in the world – twenty five years of no communication” —- Chinese Premier Zhou Enlai to US President Richard Nixon, Beijing, 21 February 1972.
On 15 January 2020, China and United States (US) entered into a partial truce over the ongoing trade war by signing the “Phase I” of the Trade Deal. Setting specific targets for China, the “Economic and Trade Agreement”[1] entails: Beijing to purchase and import an additional US$200 billion of US goods (manufactured goods, agricultural goods, energy products) and services over the next two years.[2] To which, US agreed to reduce tariffs on US$120 billion in Chinese products from 15 per cent to 7.5 per cent. This will see an uptick in US exports to China accounting for an increase to over US$260 billion in 2020, and roughly $310 billion in 2021.[3] The impetus to the Sino-US economic divide was triggered by US filing a WTO case against China in March 2018 under the pretext of: its discriminatory licensing practices; restricting investment in key technology sectors; and imposing tariffs on Chinese products (such as aerospace, information communication technology and machinery).[4] This resulted into a cyclical increase of tariffs- with total US tariffs of US$ 550 billion on Chinese goods and total Chinese tariffs of US$185 billion on US goods.[5] Though the trade deal does pose a temporary pause to the Sino-US rift, but the query remains: ‘How sustainable is the peace?’
Undoubtedly, Sino-US relations in the current times have entered into a ‘new era’, wherein the longstanding perception of ‘engagement, cooperation’ has transpired into that of ‘competition’ and making its way to ‘confrontation’. Wherein, the Sino-US equation has become the litmus test for to prove/disprove the ‘inevitable nature’ of the ‘Thucydides Trap’. Advocating the debate, Graham Allison in his book Destined to War suggests that a war between China and US, if not inevitable, but a likelihood of war is a real possibility.[6] Such an assessment is justified by the fact that “the preeminent geostrategic challenge of this era is not violent Islamic extremists or a resurgent Russia” but “the impact that China’s ascendance will have on the US-led international order”.[7] With such assumptions at play, it deems necessary to reflect on the changing dynamics in the Sino-US relations given since the 1972 rapprochement, the relations transformed from that of being a ‘“Red Menace” to becoming a “Tacit Ally”’,[8] and undergoing a further transformation. What sparked the change in the dynamics?
Is ‘China’s rise’ the catalyst to the divide? To note, unlike the recent past, Washington’s initial reaction to Beijing’s rise was accommodative- perceiving China more of an ‘opportunity’ than a ‘threat’. Washington’s such a benign perception of Beijing can be argued to stem from its undermining of China’s might and how it will be played out in the future. One can argue so as the current tectonic shifts in the balance of power suggest otherwise. If that be so, what called for US affinity to China’s rise?
This can be traced from the debates that advocated for a cordial and cooperative partnership between a status-quo power and a rising power. Such as, in 2005, Economist C. Fred Bergsten ideated the concept of G-2 (Group of Two) a special relationship between US and China in his book The United States and the World Economy. Bergsten’s such an ‘informal’ theorem came in the advent of the global financial crisis, wherein, G-2 was seen as an economic imperative for a sustained recovery from the global financial crisis. To argue so, in 2009 in his article in Foreign Affairs on “Two’s Company”, Bergsten strongly posited that US and China should take the “lead” as:[9]
“There will be no renewed momentum toward progress on global trade, through the Doha Round or otherwise, unless they endorse it. There will be no international compact on global warming unless they embrace it. The United States is the world’s largest deficit/debtor country, and China is the world’s largest surplus/creditor country — and there will be no resolution of the global imbalances that helped bring on the current crisis, nor lasting reform of the international financial architecture, without their concurrence”.[10]
Taking it further, in 2009, Robert C. Zoellick and Justin Yifu Lin argued that Washington and Beijing should not just work together to quell the global economic crisis but also shape the future as well- advocating G-2 as a ‘strategic economic dialogue’ mechanism.[11] Expanding the scope from economics to that of geopolitics, former US National Security Advisor Zbigniew Brzezinski,[12] advocated G-2 as an informal grouping to discuss security concerns over nuclear issues such as North Korea, Iran; instability in the Middle-East and others that call for geopolitical risks to the international order.[13]
Although not officially accepted, but corollary to the G-2 framework was witnessed in the institutionalisation of the ‘U.S.-China Strategic and Economic Dialogue’ (S&ED)[14] in 2009, wherein both countries advocated a “commitment to building a positive, cooperative, and comprehensive U.S.-China relationship in the 21st century”.[15] Wherein, in the first S&ED meeting, US President Barack Obama advocated a reflected of G-2 by pronouncing:
“The relationship between the U.S. and China will shape the 21st century, which makes it as important as any bilateral relationship in the world … If we advance [our mutual] interests through cooperation, our people will benefit and the world will be better off- because our ability to partner with each other is a prerequisite for progress on many of the most pressing global challenges”.[16]
Endorsing a similar vision, Chinese President Xi Jinping in 2013,at the Sunnylands Summit ideated the concept of “New Type of Great Power Relations” (can be called a Chinese version of G-2) embedded in a three-point proposal: (a) no conflict or confrontation, through emphasising dialogue and treating each other’s strategic intentions objectively; (b) mutual respect including for each other’s core interests and major concerns; and (c) mutually beneficial cooperation, by abandoning the zero-sum game mentality and advancing areas of mutual interest.[17] However, this perception of a ‘special cooperative partnership’ has witnessed a significant shift under the dynamics of US-China Trade War since 2017. What implications does it hold?
The unfolded dynamics under the tensions of trade war has clarified two perspectives: First, the trade war has disproved the liberal wisdom that economic interdependence helps alleviate political distrust. However, as witnessed, in case of Sino-US, economic interdependence has resulted into a political distrust. Second, it has manifested a heightened security dilemma between the two countries as witnessed in the rising security concerns in the South China Sea, Indo-Pacific Security architecture, China-US clash over Taiwan, Xinjiang and Hong Kong- pushing the envelope further.
Given these factors at play, the changing dynamics of Sino-US relations brings forth three key speculations, that are likely to witness the test of time: First, Can China and US escape the inevitable Thucydides Trap?; Second, If not, will Taiwan be the test to the reality of the Thucydides Trap?; Third, Is economy the new hard power, by which one can win without a fight?
End Notes:
[1]See, Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China, https://assets.documentcloud.org/documents/6656794/USTR-Economic-and-Trade-Agreement-Between-the.pdf, accessed online 19 January 2020.
[2]Ibid., “Chapter 6”.
[3]Michelle Toh (2020), “China just agreed to buy $200 billion worth of US products”, CNN, 16 January 2020, https://edition.cnn.com/2020/01/16/business/us-china-phase-1-trade-deal-details/index.html, accessed online 19 January 2020.
[4]White House (2018), “Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation”, 22 March 2018, at https://www.whitehouse.gov/presidential-actions/presidential-memorandum-actions-united-states-related-section-301-investigation/, accessed online 19 January 2020.
[5]Dorcas Wong and Alexander Chipman Koty (2020), “The US-China Trade War: A Timeline”, China Briefing, 16 January 2020, https://www.china-briefing.com/news/the-us-china-trade-war-a-timeline/, accessed online 20 January 2020.
[6]Graham Allison (2017), Destined to War: Can America and China Escape Thucydides’s Trap?, Boston, MA: Houghton Mifflin.
[7]Graham Allison (2015), “The Thucydides Trap: Are the U.S. and China Headed for War?”, The Atlantic, 24 September 2015, https://www.theatlantic.com/international/archive/2015/09/united-states-china-war-thucydides trap/406756/, accessed online 18 January 2020.
[8]Evelyn Goh (2005), Introduction: Constructing the U.S. Rapprochement with China, 1961-1974, Cambridge: Cambridge University Press.
[9]C. Fred Bergsten (2009), “Two’s Company”, Foreign Affairs, September/October 2009, https://www.foreignaffairs.com/articles/americas/2009-09-01/twos-company, accessed online 17 January 2020.
[10]Ibid.
[11]Ramon Pachecho Pardo (2014), “The EU and the G2: is a G3 possible?”, in Jing Wen and Wei Shen (eds.) The EU, the US and China- Towards a New International Order?, Cheltenham, UK: Edward Elgar, p. 66.
[12]Brzezinski made his proposal for a US-China G2 in a speech delivered during a conference in Beijing on 13 January 2009.
[13]Ramon Pachecho Pardo (2014), “The EU and the G2”, p. 66, n. 11.
[14]The S&ED comprised of four pillars: (a) Bilateral relations (people-to-people exchanges); (b) International security issues (nonproliferation, counterterrorism); (c) Global issues (health, development, energy, global institutions);and(d) Regional security and stability issues (Afghanistan/Pakistan, Iran, DPRK).
[15]Richard C. Bush (2011), “The United States and China: A G-2 in the Making?”, Brookings, 11 October 2011, https://www.brookings.edu/articles/the-united-states-and-china-a-g-2-in-the-making/, accessed online 19 January 2020.
[16]Ibid.
[17]Cheng Li and Lucy Xu (2014), “Chinese Enthusiasm and American Cynicism Over the “New Type of Great Power Relations”, Brookings, 04 December 2014, https://www.brookings.edu/opinions/chinese-enthusiasm-and-american-cynicism-over-the-new-type-of-great-power-relations/, accessed online 19 January 2020.
